Each week on our Industry Focus: Financials show, host Jason Moser and Fool.com contributor Matt Frankel, CFP, each discuss a stock that's on the top of their watch list. In this Nov. 16, 2020, Fool Live clip, hear why mall real estate investment trust Simon Property Group (NYSE:SPG) is on Frankel's radar, while Moser has his eye on retail giant Target (NYSE:TGT).
Jason Moser: Well, Matt, before we wrap it up this week, as most always, we want to give our listeners a stock to keep an eye on this coming week. What is your one to watch this week?
Matt Frankel: I am watching Simon Property Group, ticker symbol is SPG. They are a real estate investment trust. They're the biggest mall real estate investment trust in the world. They just announced today a revised agreement to buy one of their rivals, Taubman Centers (NYSE:TCO), another class A mall operator, and they're getting a 20% discount. They were under contracted by Taubman before the pandemic, ended up backing out of the deal, Taubman sued them, they sued Taubman, it was going to be a big mess. They just announced today that all the litigation is resolved and they're buying Taubman now for 20% less than they originally were. They are scooping up the competitor, they're broadening their reach. I've said before when it comes to malls, it's Simon and everyone else, and this acquisition just really adds to that statement. I'm a big fan.
Jason Moser: Nice. Good deal. Well, I'm going to be keeping an eye on Target. Ticker for target is TGT. They actually have earnings coming out on Wednesday. There are a number of different angles to this company now, which I find it just a fascinating business, and one where they've made so many interesting moves here in the last few years. I want to hear their perspective on the holiday season upcoming. But then there's also the Shipt angle. Remember, they acquired Shipt several years ago for $550 million in cash and that's something that has given them presence in the fulfillment space shipping and fulfillment space. A little membership model there, and then partnering with all different retailers out there. They recently announced this Ulta (NASDAQ: ULTA) partnership, which I think is pretty fascinating. Speaking of cards, there's the Target RedCard which they're working in partnership with MasterCard (NYSE: MA) and TD Bank (NYSE: TD). Penetration rates there for Target RedCard, it's hovering in that 23% to 24% range which that's just basically talking about the percentage of revenue spent within the company, the purchases made within target with that RedCard. But always interesting to see how big retailers like that pull that lever, that card. Certainly Target RedCard is something that keeps some of those customers loyal, I'd say, which is just interesting. But the business has done really well over the past several years and I'm interested to see what they have to say on Wednesday, so I will be keeping an eye on that.